Tips for Canceling a Credit Card

The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author’s alone.

The end of the year is a good time to reflect on whether you’re getting value from your credit cards. Sometimes our spending habits or travel goals change with life events, so it’s healthy to review your card strategy and approach. A question that we often get is “should I cancel a credit card?” In this video/post, I’m hoping to share my thoughts on this complicated question and review some tips to keep in mind.

If you are considering canceling your credit card, here are some things to consider.

1. Transfer or spend any remaining points:

This is a common mistake made by a lot of people. If you cancel your card, you’ll often lose the points associated with those cards. This is generally the case with cards associated with flexible points programs, like Chase’s Ultimate Rewards and American Express’ Membership Rewards. For these situations, I suggest transferring points to:

Transferring flexible points to another card is easy. Cards from all three major flexible points programs can usually share points. In fact, it’s good practice to consolidate as you’ll often need a lot of points when redeeming for travel.

Co-branded cards are ones associated with a brand other than the issuer, like the Chase World of Hyatt or Chase United MileageExplorer card. These points are with the travel partner. In this case, it’s usually safe to cancel the card without fear of losing your points. However, any charges that haven’t posted to a statement may not make it to the travel partner once you cancel the card.

2. Ask the issuer for a retention offer:

Issuers will often offer incentives to retain your membership for another year

Sometimes it pays just to ask whether you can have the annual fee waived. This is often hit or miss, so I wouldn’t do this unless you are seriously planning to cancel your card. Though it’s not uncommon for issuers to offer retention incentives to keep card members from leaving.

You’ll lose some of the benefits and perks that come with a premium card, but this method will usually allow you to keep your points. Also, this strategy is useful if you’re restricted by an issuer’s rules, such as Chase’s 5/24 rule, but want to get one of their new cards. I did this when I got my Sapphire Reserve. Since I already had a Sapphire Preferred, I downgraded it to a Freedom Unlimited since I wanted the card anyway. I was willing to forfeit the new card opening bonus since I planned to keep the card for the long term.

4. Dispose of your old card:

You’ll want to avoid placing metal credit cards in the shredder!

Most plastic cards can be destroyed in a shredder, but if your card is metal, you’ll want to send it back to the bank. Do NOT run it through a shredder since it will get stuck. Most issuers can provide a pre-paid return envelope if you need to send one in. Also, you can also drop it off with your issuer if they have a branch nearby. Though I suggest marking the card with “DO NOT USE” in the signature area.

Do you have any tips for canceling a credit card? If so, let us know in the comment section below.

If you’re interested in applying for any of the cards in this post, we encourage you to compare credit card offers. We do get a commission if you use our link. It doesn’t cost you anything extra, but it helps us to continue building content for our site and channel.